Britannia set to launch no-frills air services

Britannia Airways, the UK charter airline owned by Europe's biggest travel company Preussag, is developing a more flexible low-cost service in an attempt to carve out a niche in the growing no-frills market.

Separately, Preussag, which owns the UK's number two tour operator Thomson Travel, revealed that it was also considering launching a separate European budget airline that would operate under its banner brand name, TUI.

The moves follow confirmation last week from MyTravel, the tour group formerly known as Airtours, that it plans to launch a low-cost airline in October. MyTravel's new carrier would operate separately from its charter operations.

Michael Frenzel, Preussag's president, said: "We are examining entering the market for low-cost airlines." A new carrier would target both business and leisure travellers, he added.

Although Britannia's plans stop short of setting up a separate airline, Charles Gurassa, the chairman of Thomson Travel, said the airline would offer the same degree of flexibility as easyJet or Ryanair. "The market was underserved by Britannia in the past because we concentrated on package holidays, only selling seats at the last minute when they weren't sold as part of a package," he said.

Britannia, which flies from 21 UK airports, will offer low-cost, flexible, flight-only deals in a departure from the rigid charter model that sells return flights only in blocks of seven and 14 days.

While Mr Gurassa conceded the advent of no-frills airlines had fuelled customer demand for more choice from air travel, he denied that their success had forced charter operations to adopt a more flexible approach or struggle to compete.

"There is not a huge amount of overlap. We fly holiday customers largely from cold northern places to warm southern places, 90 per cent of easyJet and Ryanair's routes are different from ours," he said.

Customers will be able to book flexible duration, seat-only flights with Britannia on the internet from the end of June, Mr Gurassa said. Britannia, which owns 32 aircraft, intends to put on extra flights to meet the expected increase in demand.